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Pro Farmer Tech Talk

RSS By: Jim Wyckoff, Pro Farmer

Pro Farmer technical analyst Jim Wyckoff's daily thoughts.

Jim's Morning Markets Report--Feb. 22

Feb 22, 2013

Friday, February 22--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The Dow and S&P 500 stock index futures on Thursday saw
significantly technically bearish “key reversals” down
confirmed on the daily bar charts for both indexes,
following the bearish “outside day” down price action on the
daily charts for both on Wednesday. Key reversals down are
an early technical clue that the Dow and S&P 500 have put in
at least near-term market tops. Another bearish clue that
the U.S. stock market is headed for some leaner times just
ahead is that the copper futures market has been hammered
lower this week. History shows that the red industrial metal
can be a leader of significant price movements in the stock
market. In overnight news, the Euro currency hit a fresh
six-week low against the U.S. dollar overnight, on fresh
disappointing European Union economic news. The European
Central Bank said European banks are repaying long-term
refinancing loans from the ECB at a slower rate than
expected, which led to ideas the ECB will not be tightening
its monetary policy any time soon. Also on Friday the
European Commission forecast the EU economy will contract
(by 0.3%) for a second year in a row in 2013. The
unemployment rates in Greece and Spain are forecast at 27%
in 2013, with Portugal coming in at 17%. The aforementioned
news overshadowed news that German business confidence
increased in February. German bunds also rallied Friday on
the generally downbeat data coming out of the EU. There is
also uncertainty among European investors regarding the
upcoming Italian elections that begin this weekend. Next
week’s Italian government bond auctions will be a key
barometer of investor sentiment toward Italy following the
elections. After a brief period of better economic data
coming out of the European Union, just recently the EU
economic data has turned more downbeat. St. Louis Federal
Reserve President James Bullard said on CNBC Friday morning
that the Fed’s monetary policy will remain “easy” for a
“long time.” However, he added that global economic
uncertainty has decreased. Bullard’s remarks did work to
ease concerns in the market place that the Federal Reserve
will begin to back off on its easy money policies sooner
rather than later. There is no major U.S. economic data due
for release Friday.--Jim

U.S. STOCK INDEXES

S&P 500 futures: Prices are higher early today. The bulls
still have the overall near-term technical advantage. The
shorter-term moving averages (4-, 9- and 18-day) are neutral
early today. The 4-day moving average is below the 9-day.
The 9-day is above the 18-day moving average. Short-term
oscillators (RSI, slow stochastics) are neutral early today.
Today, shorter-term technical resistance comes in at
1,521.80 and then at this week’s high of 1,530.00. Buy stops
likely reside just above those levels. Downside support for
active traders today is located at this week’s low of
1,495.70 and then at the February low of 1,485.00. Sell
stops are likely located just below those levels. Wyckoff's
Intra-day Market Rating: 5.5

Nasdaq index futures: Prices are firmer in early trading.
Bulls have the overall near-term technical advantage. The
shorter-term moving averages (4- 9-and 18-day) are neutral
early today. The 4-day moving average is below the 9-day and
18-day. The 9-day average is above the 18-day. Short-term
oscillators (RSI, slow stochastics) are neutral early today.
Shorter-term technical resistance is located at Thursday’s
high of 2,741.00 and then at 2,750.00. Buy stops likely
reside just above those levels. On the downside, short-term
support is seen at the overnight low of 2,716.00 and then at
Thursday’s low of 2,699.50. Sell stops are likely located
just below those levels. Wyckoff's Intra-Day Market Rating:
5.5

Dow futures: Prices are firmer today. The bulls still have
the overall near-term technical advantage. Sell stops likely
reside just below technical support at 13,880 and then at
13,850. Buy stops likely reside just above technical
resistance at 13,970 and then at 14,000. Shorter-term moving
averages are neutral early today, as the 4-day moving
average is below the 9-day. The 9-day moving average is
above the 18-day moving average. Shorter-term oscillators
(RSI, slow stochastics) are bearish early today. Wyckoff's
Intra-Day Market Rating: 5.5

U.S. TREASURY BONDS AND NOTES

March U.S. T-Bonds: Prices are weaker early today. Bears
still have the overall near-term technical advantage.
Shorter-term moving averages (4- 9- 18-day) are bullish
early today. The 4-day moving average is above the 9-day.
The 9-day is above the 18-day moving average. Oscillators
(RSI, slow stochastics) are neutral early today. Shorter-
term resistance lies at the overnight high of 143 28/32 and
then at 144 even. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the overnight
low of 143 16/32 and then at Thursday’s low of 143 3/32.
Sell stops likely reside just below those levels. Wyckoff's
Intra-Day Market Rating: 4.5

March U.S. T-Notes: Prices are weaker early today. Bears
still have the overall near-term technical advantage.
Shorter-term moving averages (4- 9- 18-day) are bullish
early today. The 4-day moving average is above the 9-day.
The 9-day is above the 18-day moving average. Oscillators
(RSI, slow stochastics) are neutral early today. Shorter-
term resistance lies at this week’s high of 131.31.5 and
then at 132.08.0. Buy stops likely reside just above those
levels. Shorter-term technical support lies at the
overnight low of 131.20.0 and then at Thursday’s low of
131.14.5. Sell stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 5.0

U.S. DOLLAR INDEX

The March U.S. dollar index is slightly lower early today
but is hovering near a three-month high. The greenback bulls
have shown solid power recently to suggest a market bottom
is in place and that prices can trend higher in the near
term. Slow stochastics for the dollar index are bullish
early today. The dollar index finds shorter-term technical
resistance at Thursday’s high of 81.62 and then at the
November high of 81.70. Shorter-term support is seen at the
overnight low of 81.26 and then at 81.12. Wyckoff's Intra
Day Market Rating: 5.0

NYMEX CRUDE OIL

Crude oil prices are slightly higher early today and seeing
tepid short covering following the recent steep sell off.
Prices Thursday hit a six-week low. Bulls are fading amid
the very strong U.S. dollar index. In April Nymex crude,
look for buy stops to reside just above resistance at the
overnight high of $93.48 and then at $94.00. Look for sell
stops just below technical support at Thursday’s low of
$92.63 and then at $92.00. Wyckoff's Intra-Day Market
Rating: 5.0

GRAINS

Markets were higher overnight on short covering and bargain
hunting. The grain markets had been feeling pressure from
the overall selling seen in the raw commodity market sector
this week, with crude oil and gold leading the downside
price action. Also, there are bearish price and production
forecasts for the grains coming out of the annual USDA Ag
Outlook conference presently taking place. My bias is that
there is still some near-term price pressure to come in the
grains, but I am not longer-term bearish.
 

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